Small Business IT Survey: No Backup, No Data, No Business

Data loss could put up to 40 percent of companies out of business, or at least in dire financial straits, finds a new study from cloud backup provider Carbonite.

Data loss continues to plague small and midsized businesses (SMBs), and the damage isn't limited to profit loss.

Carbonite, the cloud-based backup specialist, recently surveyed 500 IT professionals at organizations with fewer than 100 employees for its 2014 Report on the State of Data Backup for SMBs (registration required). The results reveal that many small businesses are walking a fine line in terms of data protection.

One misstep and it's game over.

Forty percent of the IT professionals polled said that their small businesses would likely go out of business if they lost all of their files permanently. A whopping 58 percent said they couldn't sustain any amount of data loss.

"For a small business, data is their business," said Carbonite senior vice president Pete Lamson in an interview with Small Business Computing. Taking stock of the types of companies his company backs up, which span several industries including accounting, healthcare and insurance, it comes as no surprise that some organizations would fold if they lost their data. Carbonite, well-known for its consumer backup plans, has been providing secure cloud backup services for businesses since 2011, he said.

Despite their expertise, most professionals simply can't provide services without a foundational layer of data. "While they have a primary purpose of helping customers, they cannot serve their customers without data," explained Lamson.

And just wait until word of missing data spreads. "In terms of reputation, they're going to be in a lot of trouble," added Lamson.

Carbonite's study also found that among small business IT pros, 62 percent reported a disruption to their companies due to data loss. A third (33 percent) of those said that their profits took a hit as a result. On average, respondents said that a complete loss of data would cost their organizations $468,610 in lost revenue.

Backup Your Data for a Happy Workplace

Beyond the bottom line, data loss can also have devastating effects on employees.

Sixty-two percent of those surveyed for the report said they suffered data loss at some point in their careers. Through the lens of that experience, a workplace nightmare emerged.

Twenty-five percent said that work/life balance was thrown into chaos, while 24 percent revealed that office morale took a dive. Twenty-one percent said that the IT department was subjected to intrusive micro-management and 15 percent reported that employees were fired or laid-off as a result.

Some workers just threw in the towel. Eleven percent said that employees just outright quit after experiencing data loss.

"While data protection may be top of mind for IT, this report demonstrates why protecting data files should be a company-wide concern and policy," said Carbonite co-founder and CEO David Friend in a statement. "Beyond just the financial impact of data loss, most business owners don't realize how data loss can affect other aspects of their business, including their employees."

A Cloud Cure for Old Backups

The study also revealed some small business backup habits, and they are not encouraging. "Sixty percent of small businesses don’t back up data on a daily basis," said Lamson.

Less than a third of survey takers (32 percent) said that they backed up that same day, while nearly half backed up their documents and files within the past week. A significant minority (15 percent) said that they were sitting on backups that were a month old.

"Most businesses are backing up with antiquated hardware," said Lamson. Seventy percent backup to devices like external hard drives or network attached storage (NAS) appliances that can show their age over time.

Trouble also arises as attention spans shrink. Small business users are typically diligent about backing up their data when they're first issued external hard drives. After a few days or weeks, human nature takes over and interest wanes.

No such issues with automated cloud-based backups that reside in secure, professionally managed off-site data centers, said Lamson. Fortunately, 56 percent of small business IT professionals "get it," and leverage the cloud for their backups.

Pedro Hernandez is a contributing editor at InfoStor. Follow him on Twitter@ecoINSITE.

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